Question

The depreciating value of a semi-truck can be modeled by y = Ao(0.84)x, where y is the remaining value of the semi, x is the time in years, and it depreciates at 16% per year.

What is the value of the truck initially, Ao, and how would the graph change if the depreciation rate was 26% per year?

Answer 1

The value of the truck initially, Ao is
83000

1-0.16=0.84
1-0.26=0.74

After one year the value
Y=83,000×(0.84)=69,720
Y=83,000×(0.74)=61,420
When you compare the results you will see that the graph would fall at a faster rate to the right because the depreciation rate of 26% is higher than the depreciation rate of 16%

Hope it helps